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US trade gap swells to 21-month high
August 11, 2010--The sharp rise in the US trade gap in June was evidence that while demand in the US economy has so far held up reasonably well, a disturbing amount of it is leaking abroad.
The rise in the monthly trade deficit to $49.9bn (€37bn, £31bn), higher than analysts’ expectations, reflected a surge in imports of consumer goods and cars. Imports of capital goods, used in industrial production, also rose, but raw materials and components fell.
In a preliminary estimate of second-quarter gross domestic product released on July 30, which showed the expansion in GDP slowing sharply, net exports subtracted an annualised 2.8 percentage points from economic growth.
NASDAQ OMX Welcomes NXP Semiconductors, NASDAQ's Largest European IPO of 2010, to The NASDAQ Stock Market
August 11, 2010--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ), the world's largest exchange company, announced that the trading of NXP Semiconductors, (Nasdaq:NXPI) commenced on August 6 on The NASDAQ Stock Market. NXP Semiconductors, whose products are used in a wide range of automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer, and computing applications, is NASDAQ's largest European IPO of 2010, raising proceeds totaling $476 Million.
NXP Semiconductors was one of five companies to hold an IPO on The NASDAQ Stock Market last week. Gordman Stores (Nasdaq:GMAN), and healthcare companies, NuPath, Inc. (Nasdaq:PATH), Trius Therapeutics, Inc. (Nasdaq:TSRX), and D. Medical Industries, Inc. (Nasdaq:DMED) all also chose NASDAQ as their listing exchange. In 2010, NASDAQ has maintained a stronghold in the technology and healthcare sectors, capturing 67 percent and 86 percent of global IPOs respectively.
"NASDAQ is home to companies that offer innovative and groundbreaking products and services to their respective industries," said Bruce Aust, Executive Vice President, Corporate Client Group, NASDAQ OMX, "NASDAQ OMX is excited to welcome NXP Semiconductors and four other IPOs to The NASDAQ Stock Market this week that showcase that commitment to growth and innovation."
NASDAQ IPOs have raised more than $4.98 Billion in proceeds in 2010, and NASDAQ has captured 48 new listings across a variety of sectors. Other distinguished companies who have recently listed on NASDAQ include: SMART Technologies (Nasdaq:SMT), the largest IPO of 2010, which raised more than $660 Million in proceeds in its first day of trading, and CBOE Holdings, Inc. (Nasdaq:CBOE).
Opening Statement, Meeting of: The CFTC-SEC Joint Advisory Committee on Emerging Regulatory Issues, Washington, DC
August 11, 2010--Good morning. I am pleased to open the third public meeting of the CFTC-SEC Joint Advisory Committee on Emerging Regulatory Issues. Today we will continue our examination of the market events that took place on May 6, 2010.
I thank SEC Chairman Mary Schapiro for co-chairing today’s meeting and the Committee. I look forward to continuing to work closely with Chairman Schapiro on issues relating to May 6 as well as implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The Dodd-Frank Act for the first time brings over-the-counter derivatives under comprehensive regulation. To best protect the American public, the CFTC will work closely and consultatively with the SEC on each of our rulemakings. Staff from both agencies have already begun meeting and working together on proposed rulemakings.
I would also like to welcome and thank the members of the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues as well as our expert panelists. I look forward to hearing investor perspectives on the contributing factors to the May 6 market events.
I also would like to thank the staff of the CFTC and SEC for all of their hard work planning this meeting and reviewing the circumstances surrounding May 6.
Lastly, I want to recognize and thank my fellow CFTC Commissioners, Mike Dunn, Jill Sommers, Bart Chilton and Scott O’Malia.
Alps files with the SEC
August 10, 2010--Alps has filed a post effective amendedment, registration statement with the SEC for
ALERIAN MLP ETF (Ticker: AMLP)
view filing
Eaton Vance files with the SEC
August 9, 2010--Eaton Vance has filed an application for exemptive relief with the SEC for actively managed ETFs.
The Initial Funds are as follows:
Eaton Vance Enhanced Short Maturity ETF.
Eaton Vance Government Limited Maturity ETF
Eaton Vance Intermediate Municipal Bond ETF
Eaton Vance Prime Limited Maturity ETF
Eaton Vance Short Term Municipal Bond ETF
State Street Global Advisors Expands Innovation within Lincoln Financial Group's Variable Life and Annuity Solutions
August 10, 2010-State Street Global Advisors (SSgA), the investment management business of State Street, today announced that it has been selected by Lincoln Financial Group to sub-advise variable life insurance and variable annuity investment options, which employ a tactical asset allocation strategy and invest in a wide range of investment solutions.
The new Lincoln Variable Insurance Product (LVIP), the SSgA Global Tactical Allocation Fund incorporates a wide range of exchange traded funds (ETFs) including State Street's SPDR(R) ETFs*, as well as eight variable annuity funds currently sub-advised by SSgA Funds Management, Inc. and offered in Lincoln Variable Life and Annuity solutions including the Lincoln ChoicePlus Assurance(SM) variable annuity product platform.
"We are excited to expand our collaboration with State Street Global Advisors," said Daniel Hayes, head of Funds Management, Retirement Solutions, Lincoln Financial Group. "Lincoln Financial is committed to providing access to the most sophisticated and advanced solutions in the insurance industry, and this endeavor will further enhance our investment portfolio for our valued clients."
The fund was transitioned from its existing sub-advisor to SSgA on August 2, 2010.
"Demand for ETFs in the variable life and annuity space has been significant due to the relatively low cost of ETFs and the trading and diversification benefits that these funds provide," said Anthony Rochte, senior managing director at State Street Global Advisors. "SSgA's client-focused solutions, such as our SPDR ETFs, combined with Lincoln Financial as an innovator in the insurance industry, present a powerful proposition to both financial advisors and investors alike."
SSgA manages eight individual sub-accounts as well as the LVIP SSgA Index and LVIP SSgA Structured asset allocation offerings within the Lincoln ChoicePlus Assurance(SM) offering.
Backed by the full range of SSgA's broad product offerings, global reach and client support, SSgA's US Sub-Advisory business works with a wide range of mutual funds, defined contribution recordkeepers, variable annuity and insurance companies.
Barclays Launches Eight New iPath® Exchange Traded Notes Linked to US Treasury Futures Indices on NYSE Arca
August 10, 2010--NYSE Euronext (NYX) announced that its wholly-owned subsidiary, NYSE Arca, today began trading eight new iPath exchange traded notes (ETNs) issued by Barclays Bank PLC. These are the first iPath® ETNs that provide exposure to fixed income strategies.
The following are the new ETNs and their exchange ticker symbols:
iPath® US Treasury Steepener ETN (STPP)
iPath® US Treasury Flattener ETN (FLAT)
iPath® US Treasury 2-year Bull ETN (DTUL)
iPath® US Treasury 2-year Bear ETN (DTUS)
iPath® US Treasury 10-year Bull ETN (DTYL)
iPath® US Treasury 10-year Bear ETN (DTYS)
iPath® US Treasury Long Bond Bull ETN (DLBL)
iPath® US Treasury Long Bond Bear ETN (DLBS)
These eight new iPath® ETNs are medium-term notes that are senior unsecured debt obligations of Barclays Bank PLC with a maturity of ten years. The ETNs will be issued in denominations of $50. The return on the ETNs is based on a participation rate of $0.10 gain or loss per each 1.00 point decrease or increase, respectively, in the level of the applicable Index, plus the income accrued from a notional investment of the value of the ETNs at the 28-day U.S. Treasury Bill rate, less certain costs and fees.
See the product website at www.iPathETN.com for the prospectuses and further information.
Global Equity Index & ETF Research -- US ETP Market Weekly Review
August 10, 2010--New Listings and Delistings
There were three funds listed over the previous week in NYSE Arca. Charles Schwab IM entered the Fixed Income space by introducing three new products offering inflation protected, short term, and intermediate-term US Treasuries exposure. As they have done with their previously listed ETFs, the new listings offer the lowest TER among their peers and $0 online trading commissions for Schwab accounts.
Net Cashflows
Total ETP inflows in the US added up to $5.8 bn during the previous week. Equity and Fixed Income ETPs had inflows of $6.0 bn and $80 mm, respectively. Commodity and Currency ETPs, on the other hand, experienced outflows of $309 mm and $24 mm, respectively.
Within Equity ETPs, Large Cap ETPs received the largest inflows ($3.4 bn) followed by Emerging Market Regional ETPs, while Small Cap ETPs saw the largest outflows ($1.1 bn).
The Fixed Income ETPs inflows were led by Corporates ETPs ($486 mm), while Sovereign ETPs experienced the largest outflows ($568 mm), almost offsetting all the other categories.
Commodity ETPs experienced outflows again, driven mainly by Crude Oil ETPs ($255 mm), it is worth to point out that Gold ETPs recorded mild positive flows ($26 mm) after a series of weeks experiencing outflows.
Turnover Avg. Daily Turnover decreased by 8.6% and totaled $62 bn at the end of the week.
Assets Under Management (AUM)
US ETPs AUM rose by 2.3% totaling $845 bn at the end of the week. Equity ETPs account for 73% of the assets with $620 bn, followed by Fixed Income funds with $141 bn and 17% of market share.
To request a copy of the report
United States Commodity Funds LLC Launches the United States Commodity Index Fund (USCI)
August 10, 2010-- United States Commodity Funds LLC, a sponsor of exchange traded commodity funds, listed for trading on the New York Stock Exchange Arca a new exchange traded commodity index fund, United States Commodity Index Fund, under the ticker "USCI".
The United States Commodity Index Fund (USCI) is an exchange traded product ("ETP") that seeks to reflect the performance of a diverse group of commodities. USCI issued units may be purchased and sold on the NYSE Arca. The investment objective of USCI is for the daily changes in percentage terms of its units' net asset value ("NAV") to reflect the daily changes in percentage terms of the SummerHaven Dynamic Commodity Index, less USCI's expenses.
United States Commodity Index Fund's target is a diversified basket of the most important physical commodities in the global economy. These commodity holdings are among the most actively traded futures contracts and represent the primary U.S. and non-U.S. benchmarks for each commodity. The portfolio consists of positions in listed commodity futures contracts and other commodity-related futures, forwards and swap contracts. These investments will be collateralized by cash, cash equivalents and U.S. government obligations with remaining maturities of two years or less.
Barclays Launches Eight New iPath(R) Exchange Traded Notes Linked to US Treasury Futures Indices
New iPath(R) ETNs allow investors to express views on the shape of the US Treasury yield curve
August 10, 2010--Barclays Bank PLC announced that today is the first day of trading for eight new iPath Exchange traded Notes (ETNs) on the NYSE-Arca stock exchange. These are the first iPath(R) ETNs that provide exposure to fixed income strategies.
The following are the new ETNs and their exchange ticker symbols:
iPath(R) US Treasury Steepener ETN (STPP)
iPath(R) US Treasury Flattener ETN (FLAT)
iPath(R) US Treasury 2-year Bull ETN (DTUL)
iPath(R) US Treasury 2-year Bear ETN (DTUS)
iPath(R) US Treasury 10-year Bull ETN (DTYL)
iPath(R) US Treasury 10-year Bear ETN (DTYS)
iPath(R) US Treasury Long Bond Bull ETN (DLBL)
iPath(R) US Treasury Long Bond Bear ETN (DLBS)
"The new ETNs allow investors to take a view on whether the yield curve will steepen or flatten or if specific yields might increase or decrease," said Philippe El-Asmar, Managing Director, Head of Investor Solutions at Barclays Capital. "This launch underscores our commitment to expanding the iPath ETN platform in the US and providing investors with innovative investment solutions across all asset classes. The ETN market in the US has grown tremendously since it launched in 2006 with over $10 billion assets currently under management in ETNs."
These eight new iPath(R) ETNs are senior, unsecured, unsubordinated debt securities of Barclays Bank PLC.
iPath(R) ETNs are designed to provide investors with convenient access to the returns of market benchmarks, less investor fees. Subject to the requirements described in the applicable prospectus, the securities can be sold in the secondary market during trading hours at market prices, and may typically be redeemed in at least 50,000 units on a daily basis directly to the Issuer(1).
The prospectuses can be found on EDGAR, the SEC website at: www.sec.gov, as well as on the product website at www.iPathETN.com.
Barclays Bank PLC is the issuer of iPath ETNs and Barclays Capital Inc. is the issuer's agent. BlackRock's broker dealer affiliate, BlackRock Fund Distribution Company, engages in the promotion of iPath ETNs to intermediaries.
Commodity ETF Tracking Yale Professors' Index of Raw-Material Mix Debuts
August 10, 2010--The United States Commodity Index Fund, an exchange-traded fund tied to an index designed in part by two Yale University professors whose research earlier this decade helped spur a commodities rush, begins trading today.
The index was created by SummerHaven Index Management LLC, based in Stamford, Connecticut, with the help of K. Geert Rouwenhorst, whose 2004 paper with colleague Gary Gorton, titled “Facts and Fantasies About Commodity Futures,” argued that an investment in a broad commodity index would have brought positive returns from 1959 to 2004. Both are professors of finance at the Yale School of Management.
United States Commodity Funds Launches the first 3rd Generation Commodity ETP
August 10, 2010--The United States Commodity Funds is pleased to announce the launch of the United States Commodity Index Fund (NYSE: USCI), the first 3rd Generation Commodity ETP. USCI seeks to provide clients with diversified commodity exposure while addressing some of the major obstacles of investing in commodity futures.
USCI is based on the SummerHaven Dynamic Commodity Index (SDCI), a rules based commodity index that seeks to identify long-term sources of return in commodity futures based on fundamental signals about the underlying physical commodity markets.
USCI differs from other Commodity ETFs in the following ways:
Commodity Selection - Unlike 1st and 2nd generation commodity indices which are always fully invested in the same commodities, the SDCI is comprised of 14 Futures Contracts that will be selected on a monthly basis from a list of 27 possible Futures Contracts.
Commodity Weighting - Each of the 14 commodities in the SDCI are equally weighted, providing meaningful exposure to each commodity that we believe has the best chance to outperform in the short-run.
Curve Selection - Rather than obtaining all of our commodity exposure at the front month, the SDCI is rules-based and rebalanced monthly. The composition of the SDCI in any given month will be determined by quantitative formulas relating to the prices of the futures contracts as they relate to both price momentum and inventory levels.
Visit http://www.unitedstatescommodityindexfund.com/ for more info
Agencies Issue Advance Notice of Proposed Rulemaking Regarding Alternatives to the Use of Credit Ratings
August 10, 2010--The federal banking agencies (agencies) today have agreed to publish an advance notice of proposed rulemaking (advance notice) regarding alternatives to the use of credit ratings in their risk-based capital rules (capital rules) for banking organizations. The advance notice is issued in response to section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Act), enacted on July 21, 2010, which requires the agencies to review regulations that (1) require an assessment of the credit-worthiness of a security or money market instrument and (2) contain references to or requirements regarding credit ratings. In addition, the agencies are required to remove such references and requirements and substitute in their place uniform standards of credit-worthiness, where feasible.
Through this advance notice, the agencies are seeking to gather information as they begin to develop alternatives to the use of credit ratings in their capital rules. This advance notice describes the areas in these capital rules where the agencies rely on credit ratings, as well as the Basel Committee on Banking Supervision's recent amendments to the Basel Accord. The advance notice solicits comment on alternative standards of creditworthiness that could be used in lieu of credit ratings. It requests comment on a set of criteria the agencies believe are important in evaluating creditworthiness standards, including risk sensitivity, transparency, consistency, and simplicity. It asks for comment on a range of potential approaches, including basing capital requirements on more granular supervisory risk weights or on market-based metrics, as well as on how these approaches might apply to different exposure categories. It also seeks comment on the feasibility of and burden associated with alternative methods of measuring creditworthiness for banking organizations of varying size and complexity.
FOCM Statement
August 10, 2010--Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.
Measures of underlying inflation have trended lower in recent quarters and, with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve's holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.1 The Committee will continue to roll over the Federal Reserve's holdings of Treasury securities as they mature.
The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh.
Voting against the policy was Thomas M. Hoenig, who judges that the economy is recovering modestly, as projected. Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and limits the Committee's ability to adjust policy when needed. In addition, given economic and financial conditions, Mr. Hoenig did not believe that keeping constant the size of the Federal Reserve's holdings of longer-term securities at their current level was required to support a return to the Committee's policy objectives.
1. The Open Market Desk will issue a technical note shortly after the statement providing operational details on how it will carry out these transactions.
State Street Global Advisors-ETF SNAPSHOT: JULY 2010
August 10, 2010--As of July 31, 2010, 917 ETFs — with assets totaling approximately $822BN — were managed by 33 ETF managers. ETF industry assets rose $50BN for the month — up 6.5%.
Year-to-date, ETF assets have increased $46BN, or 6.0%.
STATE STREET HIGHLIGHTS, JULY 2010
br>SPDR® Barclays Capital High Yield Bond ETF [JNK] surpassed $5BN in assets in July, fueled by inflows of more than $628MM in July and $1.6BN year-to-date.1 JNK trades 2,313,977 shares per day (20 Day Avg.) and has an average daily volume of more than $91MM dollars — making it the most liquid high yield bond ETF. JNK has had the highest inflows of any high yield bond ETF YTD.
ASSET CLASSES OVERALL
The S&P 500® Index bounced back in July, returning 7.1%, while the MSCI EAFE Index and MSCI Emerging Markets Index rose 9.5% and 8.4%, respectively. US Bonds advanced with the Barclays U.S. Treasury Index gaining 0.7% and the Barclays U.S. Aggregate Index climbing 1.1%. For Commodities, the S&P® GSCI Index returned 5.6% in July.
The International and Size categories had the largest increases in AUM.
The Commodity category saw the largest decline in assets, dropping $3.7BN, or 4.7%.
SIZE/STYLE
Large Cap had the largest increase in assets, up $6.7BN followed by Small Cap with $3.3BN.
AllCap - Value was the only category with a decline in assets for the month, down $2MM.
SECTOR
All Sector categories saw increases in assets in July with the exception of Materials, down $436MM, or 3.6%.
Energy and REITs led asset increases, gaining $1.2BN and $1.3BN, respectively.
For more information, including research and statistics, please visit www.spdrs.com.
